The Portland daily press., 1887-03-18
A Not Entirely Satisfactory Explana-

To the Editor Of the Press.
The answer to my inquiry in yesterdays
PRESS which the Advertisers reporter attri-
butes to the Mayor is not entirely satisfac-
tory.
Is the assertion that 'there are per cent
securities enough in the market to supply
trustees of trust funds true? If so, [
should like to be informed of them, for 1
have had occasion to look for such lately and
have been unable to find them. | am not
aware of single per cent bond to be COM
pared with Portland bond in safety which
can be obtained in this market at par.
1t is also evident that no premium is really
anticipated on the sale of our per cents,
because the issue is fully up to the entire
sum required.
Again, is it desirable to have our bonds at
premium? The fact that we are TODAY
burdened by several millions of per cent
city bonds on long terms Of years at very
high premium makes it impossible to call
them in during the present century.
1t may not be advantageous to have our
municipal bonds selling under Ipar, although
| fail to see any good reason for such an as
them to be at high premium.
what fear is that our per cent loan will
bring little or no premium to the city, but
Will bring a high premium TO brokers and
otner purchasers as soon as it gets fairly out
OF the city's hands, so that the whole scheme
will result in needless taxation for the next
10 years, loss at one per cent of $3.50 an
nually, or $4,000 in all.
If, as seems to be implied by the illustra-
ton imputed to the Mayor, 81 per cent is
a q In rot ff fnFa g.,
1925 bond. why not say so in the bond, and
thus avoid both premium and discount?
The transaction may be represented by a 4
per cent bond at corresponding premium"
to the broker who sells them at that premi-
um, but it will not be so represented to the
tax payer, who is compelled for 10 years to
pay his share of the 4 per cent tax annually,
unless the city obtains the tull premium in
stead of the broker.
am to-day informed that Cambridge,
Boston and Philadelphia have also recently
marketed per cent loans at premium. and
am stlll OF opinion that the same thing
might be effected for Portland whose bonds.
we are told, have always borne premium
heretofore"
The Mayors impression that the new State
per cents have 80 or 40 years to run is a
mistake; they run from one year to 40, aver
aging only 20 years, not materially longer
than ours.
And it was of a 500 Maine bond that the
two Portland brokers were speaking, when
they assured me a fortnight ago, that in their
opinion, they could be floated at % or q per
cent.
The melancholy experience of our city in
its past loans justifies doubt in reference to
the lnfallibility of municipal financeering in
reference to the one about to be issued.
In case the new loan yields little or no
premium to the city, but nevertheless, short
~ commands handsome premium in the
hands Of purchasers, the loss to the city can
readily be computed.
1t may be worth while to note the result.
Speaking of premiums, allow me to ask II
the city of Portland or any of its taxpayers
ever realized ''the benefit" to use the MAYORS
imputed language of any portion of the
enormous premiums which our outstanding
6per cent. bonds are now commanding?
q w n